The Spotify contender is for sale, according to Breakit’s sources.
At end of March, when hip-hop icon Jay-Z announced together with world stars such as Madonna, Kanye West and Beyoncé, that he would re-launch musical service Tidal, it became world news, and Breakit were first to report about it.
When Jay-Z took over, Tidal seemed like it could become one of Spotifys fiercest competitors.
But the growth rate never increased all that much and once Jay-Z, a few weeks ago, invited to a party for celebration of Tidal having broken the million measured in prescribers, it was not viewed as any major success.
In reality, one million users meant that Tidal had only managed to gain 500.000 new users the past six months, despite massive attention.
Right before the re-launch of Tidal, Jay-Z acquired Swedish-listed Aspiro for $56 million. Aspiro ran two music services, Wimp and Tidal, with half a million users combined. When Jay-Z took over he had merged the music services and allowed the current subscribers to be a foundation of Tidal’s new user base.
Already ahead of Jay-Z taking over the business, Aspiro was making a great loss. Last year, turnover was $35 million with a $10 million loss. Figures for 2015 have not been made public but nothing points towards losses being lower.
According to Breakit’s sources, Jay-Z has grown tired of financing the business on his own and he is now actively looking for a new owner. Representatives of Tidal have contacted several potential bidders but it is so far unclear whether any solid negotiations have been initiated.
“Tidal is not doing very well and they are losing money. Jay-Z has not managed to grow the business as expected”, one of Breakit’s information providers says.
When being in touch with potential buyers of Tidal, Jay-Z’s representatives have indicated that they want at least the same amount of money corresponding to what he invested in the company.
“It does not feel realistic when keeping in mind how the company has developed the past months”, Breakit’s source says.
The competition on the streaming musical market has become severely tougher since Tidal’s new launch in March. Apart from Apple’s launch of Apple Music, Google have included a music service with new pay-service YouTube Red.
A couple of weeks ago there were speculations whether Jay-Z would sell Tidal to the Korean electronics’ giant Samsung, after he was caught on camera outside the company’s office in Silicon Valley. Those were, however, speculations and the Samsung affair is not verified by Breakit’s sources.